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If Car Insurance Companies Penalize You For ANY Accident, Why Do They Ask If You Had Any “At Fault Accidents?”
August 31, 2020
Several Factors Influence Your Car Insurance Rates.
Claims history is one of the major rating factors that insurance companies use to determine auto insurance rates in most states.
Though not-at-fault accidents may not result in a state-mandated surcharge, they can, and are used to determine what is called by insurance companies “tiering”, or “tier placement”.
Auto insurance company’s rating schemes may utilize dozens of “tiers” ranging from lower to higher rates depending on which of those “tiers” an insured qualifies. Accident frequency and/or severity has a significant influence that determines the rating tier in which an insured will be placed.
Though every insurance company uses a different rating algorithm, one can rest assured that fewer claims, regardless of fault, will benefit them when seeking the best rate.
If you’d like to geek out on information related to the use of accidents and rating tiers see this article by the Casualty Actuarial Society here: 2010 CAS Spring Meeting - Balancing Rate Competitiveness and Rate Stability with Rating Tiers - A Case Study for Personal Auto Insurance.
The use of tiering makes the strategy of utilizing higher deductibles and self-insuring for smaller losses a wise strategy to save money on auto insurance now and into the future.
Do you have additional questions about how to optimize your auto insurance coverage and minimize your premium? We LOVE to help! Please feel welcome to call us by dialing (607) 324-7500. To find the Ryan Agency office nearest you, please click here.
This article may have been originally published at Quora.com.
To see Jeff's Quora.com profile click here.
“Am I covered if I drive someone else’s car?” Or, “Am I covered if someone else drives mine?”
Many don’t realize that the insurance industry is one of the country's most regulated business segments, especially in New York State. The New York State Department of Financial Services (NYS DFS) wields significant control over the insurance business and has a stated goal of protecting consumers.
Most property insurance companies offer Actual Cash Value or Replacement Cost settlement options. Typically, insurance companies will require that you insure the property to the settlement value you choose. If you select Actual Cash Value, the amount you may be required to insure the property for will be less than the corresponding Replacement Value.
In that spirit, the Ryan Agency is sponsoring a Stearns BBQ Dinner pickup at our office on 57 Broadway Mall in Hornell on September 12th from 3:00 PM to 4:30 PM.
Today, an individual’s credit history can play a more significant role than any one of those traditional factors. Good Credit Scores lead to a Positive Insurance score. A good Insurance Score greatly influences what someone will pay to insure their vehicles.
Insurance companies offer various discounts for which their policyholders may qualify.
Great Eight number Six (6) suggests taking a look at removing Comprehensive and Collision on Older Vehicles.
By reducing the number of claims in your insurance history, you can significantly affect your rates in the future.
Sometimes, this concept meets with resistance from policyholders. The thought of paying more in the event of a claim is off-putting to some. Even if that means I pay more for my insurance.
OK. Admittedly, this strategy doesn't benefit everyone, but it can be very beneficial for those it does. You may have unique home or auto insurance needs that prevent you from bundling with the same company. Alternatively… you might have a better rate without the bundle discount by splitting up your insurance between multiple carriers.
